The Ingredients of Recurring Partner Revenue: Volume and Customer Satisfaction

Thank for all the fantastic responses to my post in January where I talked about recurring revenue. This is clearly a topic that everyone loves; everyone is seeking the magic formula for recurring revenue growth. Part of the secret sauce of recurring revenue is that you need to build scale -- and that means volume.

The best way to build volume is to price your services competitively and provide top-notch customer satisfaction. And if you want to sell at volume and maintain both quality and profitability, you need standardization: Think about your company as a highly efficient plant where you always safeguard the quality of what is being produced and delivered.

Being affordable and generating a great ROI for your customers will pay off. After all, that's what Microsoft has always done and it has served them well. When Microsoft enters a new category, they make sure to bring great value for money as they want to build volume and market share. This benefits you as a partner, as well as your customers.

Happy customers are your best sellers. It's crucial to make sure that they are indeed happy and don't leave. If customers leave too early and in significant numbers, that indicates that you're doing something wrong. It's demotivating to sales teams if they have to hunt for new business just to compensate for old customers leaving. In fact, nothing should be more important than whether your customers are happy or not. And winning back an unhappy customer by working with them to resolve issues can actually turn them into great ambassadors.

What can you do about customer satisfaction? Here are the guiding principles that I make sure the organizations I lead follow:

• Make sure your services constantly evolve and become better every month. Don't try to upsell your customers to the new version; just roll it out for free. (As a side note, make sure the monthly improvements are incremental, and not major new releases every other year.)
• Survey your customers in a rhythm so you get an overall view of their customer satisfaction.
• Talk to some of your customers and ask them how they feel. When you're small, you should talk to everyone, but as the number of your customers grows, you should prioritize meeting the ones where you have challenges.
• Involve your customers in your services roadmap. (And yes, you should definitely have a roadmap as that is crucial for long-term planning.) Customers can help you determine what to add and what to prioritize. Involving your customers in roundtable discussions or other gatherings creates a community of ambassadors while also giving you valuable insights.
• Take care of problems right away; don't leave your customers hanging if you want them to be happy. And over-invest to win customers back.
• Don't raise your prices too much or too often. Profitability comes foremost from volume.
• Don't be greedy and forget to invest in improving your services. Rest assured that your competitors will always invest to try to win your market share.
• Make sure that your people are happy. You can never have happy customers if your own people are unhappy. Make sure you delegate heavily and provide viable internal career paths. Make sure that your internal culture reflects how a healthy workplace should look like and give people freedom to flourish.
• In all your team meetings, customer satisfaction should always be on the agenda. Looking at trends and deciding what you can do to make your customers even happier leads to long-term success.

And if you're lucky to have partners that resell or refer your services, then everything above also applies to them. Happy partners, with happy customers, will create an unstoppable wave of success for you to surf.

Posted by Per Werngren on February 24, 2025